In the past several months I have had at least three people contact me claiming to represent various Real Estate Brokerages in my area.
The general spiel is that they are a business that assembles brochures for these brokerages that are basically lists of recommended vendors that work with the brokerages. There are spots on these brochures for, appraisers, lenders, home inspectors etc. The idea sounds rosy enough, and is that those on the list will be more “visible” and therefore will more likely be used by the agents and clients of that brokerage.
Regardless of how these proposals are presented, they represent “pay-to-play” schemes--and not all that rosy at all. While it may not be illegal for these businesses to create these brochures for their clients, it is illegal in the State of Washington for home inspectors to take part in them. I am not sure of the legality of other professions signing up for these programs, but I suspect that some would have requirements similar to home inspectors.
The Washington State, Home inspector, Code of Ethics clearly states in #9 that the home inspector will,
“Not provide compensation, inducement, or reward directly or indirectly, to any person or entity other than the client, for the referral of business, inclusion on a list of recommended inspectors or preferred providers or participate in similar arrangements. The purchase and/or use of low-value advertising or marketing services or products that does not exceed ten dollars per item, is not considered inducement or reward.”
The promotions that I have been contacted about are well over the $10.00 limit and are typically in the several hundred dollars per year.
Some beginning home inspectors are vulnerable to these schemes as they see it as an easy way to get a foot in the door with the brokerages. The reality is that agents tend to use the best services they can—not the ones that are paying to be noticed.
It would be interesting to know how prevalent these schemes are in the industry.
Charles Buell, Real Estate Inspections in Seattle
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WA State, Home Inspector Advisory Licensing Board